The Real Estate Bloggers

Chamillionaire – Foreclosure Better Than Paying

Posted: 03 Jun 2010 01:04 PM PDT

Chamillionaire-houston-mansion If you want an example of the old school philosophy between doing whatever it takes to pay ones mortgage to the new school “lets just walk away from the home when it is upside down”, we need to take a look at rapper Chamillionaire.

He is definitely in the walking away camp.

This could be scary as a new generation sees the housing market not as a person’s castle and lifelong goal but as a disposable asset. The need to invest, manage, maintain, and let us be honest, pride of ownership, is a big part of while housing is successful in the country.

That goes away, like it has with Chamillionaire and others, we are going to have bigger problems with housing than just a downturn.

TMZ has learned Chamillionaire lost the 7,583 sq. foot home — which he picked up for roughly $2 million back in 2006 — after failing to make several payments.

But, yesterday in New York we spoke with Chamillionaire — real name Hakeem Seriki – who told us he “decided to let that house go” because the real estate market had turned and the house had become a bad investment.

Chamillionaire also noted that he was never at the home because, “I was always on the road touring” adding, “I just didn’t feel like it was a good business investment to pay that much mortgage for a house I was never at.”

But Chamillionaire claims he’s far from broke — quipping, “I still got all the cars.” via TMZ

Tags: Chamillionaire

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Chamillionaire – Foreclosure Better Than Paying

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NAR Asking For Extension on Tax Credit Eligibility

Posted: 03 Jun 2010 06:58 AM PDT

The National Association of Realtors is back with it’s hat in hand walking the halls of Congress. Today, they are asking to extend the closing window on the tax credit. The law states that homes had to close by June 30th, 2010. But with the foreclosures, short sales, and bump in the market activity, getting to the closing time for many buyers is not going to happen.

We are already seeing many of the contracts that were signed in expectation of the tax credit run into difficulties. Now, agents and the NAR are afraid that another whole crop of sales will not make it to the table in time to qualify for the handout.

The problem, says the National Association of Realtors, is that many of those signed contracts are on foreclosures and short sales, where the lender allows the house to sell for less than the amount owed to the bank. Those transactions take longer than normal to process, and there’s some concern that many sales may not actually close in time.

“There could be a sizable number of home buyers who responded to tax credit incentives, but may encounter problems,” said Lawrence Yun, the trade group’s chief economist, in Wednesday’s report that showed a 6% surge in pending home sales during April.

The NAR and its members are asking Congress for flexibility with the June 30 deadline, but it is unclear when—or even if—something would happen. (The National Association of Home Builders says it is not asking for a deadline tweak.) Congress would have to pass such a measure quickly, which is no easy task. One possibility would be to attach the extension to a piece of legislation that’s already winding its way through both chambers.

The reality is that when a business needs the government subsidies to function, it is not in a really good place. We all want the housing market to rebound. Agents, homeowners, potential homeowners, everyone.

It is too important to our economy and our self worth. However, when it is being driven by subsidies and gimmicks, the market is not healthy.

To put matters into perspective. John bought a $200,000 home April 30th with the $8,000 tax credit and closed in time. The market dips because traffic is down, remember it got pulled forward, and real estate double dips.

In December he gets the home appraised, he may have a job offer in another city, and the appraiser says the home is worth $190,000. Demand has dried up, mortgage rates are up so people can not borrow as much, you know the story.

My question to you is, does John feel like the market is healthy and that he got a good deal on the home?

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NAR Asking For Extension on Tax Credit Eligibility